European Stocks Close Lower As Rate Concerns Resurface

(RTTNews) - European stocks closed lower on Thursday on concerns the Federal Reserve might not reduce interest rates more than one time this year despite soft consumer price and producer price inflation data.

The Fed held interest rates steady but cautioned that inflation is still too high to start cutting policy rates.

Closer home, European Central Bank Governing Council member Joachim Nagel warned that consumer price growth in the euro zone is proving stubborn and that he and his colleagues won't simply lower borrowing costs automatically. Governing Council Madis Muller is due to speak later in the session.

In economic releases today, Eurostat said in a report that industrial output in the euro zone declined by 0.1% in April compared to March.

Elsewhere, German wholesale prices continued to decline in May, albeit at a slower pace, Destatis reported.

Wholesale prices registered an annual decline of 0.7% in May, which was slower than the 1.8% decrease in April.

The pan European Stoxx 600 dropped 1.31%. The U.K.'s FTSE 100 ended down 0.63%, Germany's DAX ended down 1.96%, and France's CAC 40 lost 1.99%. Switzerland's SMI ended 0.59% down.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Netherlands, Norway, Poland, Portugal, Spain and Sweden ended notably lower.

Iceland and Russia edged down marginally, while Turkiye closed higher.

Shares of automakers BMW, Renault, Mercedes Benz and Volkswagen fell today after the European Union announced a hike in tariffs on electric vehicles imported from China, potentially paving a way to trade war.

In the UK market, Intermediate Capital Group ended down 5.36% and Ashtead Group lost 4.6%. Persimmon, RS Group, Land Securities, Kingfisher, Fresnillo, Croda International, Berkeley Group Holdings, Legal & General, Entain, WPP, RightMove, Prudential, Schrodders, Rentokil Initial, Smith (DS), Airtel Africa and IMI lost 2 to 4%.

Halma soared nearly 13.5% after the health and safety device maker posted strong annual results.

BT Group shares gained 4.3% after Carlos Slim, the wealthiest individual in Latin America, bought a 3.2% in the broadband and mobile operator.

Severn Trent rallied 4.2%. United Utilities, Haleon, Reckitt Benckiser, Sainsbury (J), Ocado Group and Anglo American Plc ended with sharp to moderate gains.

In the German market, Siemens, Zalando, Continental, Volkswagen, Fresenius Medical Care, Deutsche Bank, Daimler Truck Holding, Porsche, Covestro, Siemens Energy, HeidelbergCement, Commerzbank, BMW and Merck lost 2 to 4.1%.

Mercedes-Benz, Puma, Infineon, Bayer, BASF, SAP and Brenntag also ended sharply lower.

In the French market, AXA, Eurofins Scientific, Edenred, Air Liquide, Saint Gobain, Dassault Systemes, BNP Paribas, Schneider Electric, Capgemini, Engie, Stellantis, Vinci, Safran, TotalEnergies, Credit Agricole and STMicroElectronics lost 2 to 4.6%.

Following yesterday's tamer-than-expected consumer price inflation data, a report released by the U.S. Labor Department today showed a modest decrease by producer prices in the month of May.

The report said the producer price index for final demand dipped by 0.2% in May after climbing by 0.5% in April. Economists had expected producer prices to inch up by 0.1%.

The report also said the annual rate of producer price growth slowed to 2.2% in May from an upwardly revised 2.3% in April. Economists had expected the annual rate of producer price growth to accelerate to 2.5% from the 2.2% originally reported for the previous month.